Not Sure What To Do Next

leebarton

Hi all

I am after constructive advice and guidance over what I can do about finances.

I am a married mother of two, with another due in October. I am working full time, but start maternity leave on October 4th. OH is self-employed, but not currently taking a wage. We had a shop until the end of May and are working towards securing a new lease by the new year. In the 12 months we had the shop the wage was about £2000 as it is a new business.

My maternity pay is less than my current wage and I will get 6 weeks at 9/10, 12 weeks at half + smp - followed by 21 weeks of just smp.

Our current outgoings are:

Council Tax - £189

(This is until April and includes water and sewerage as we are in Scotland - then it should go down to about £120)

Rent - £390

Gas/Electric combined - £90

Car Insurance - £25.36

Car Tax - £12

TV Licence - £11.95

BT inc Broadband and Freeview - £39.50

Mobile - £30 - tied in until May 09

Life Insurance - £16.85 for me and OH

First Direct Loan - £321.65

(Is for about 20k over 80 months - currently about 3 years in)

Virgin CC - £2000@34.9% - currently paying £40 a month

Mint CC - £3000@19% - currently paying £80 a month

Fuel - £200 a month - we are down to one car and only do the mileage we have to.

Groceries - currently on a challenge to only spend £300 a month.

Presents - works out at £50 a month for all birthdays and Christmas.

Incomings

Wages - currently £1285

Child Benefit - £125.40

Tax Credits - £300

Total Outgoings = £1801.31

Total Incomings = £1710.40

I have tried to apply for another credit card to reduce the interest but have been knocked back.

I am planning on speaking to tax credits as they will go up when I finish work. I also have the forms to fill in for housing and council tax benefit. I ran through entitledto.com and no other benefits came up.

What is my best course of action as we don't have IVA's up in Scotland?

Thanks for your help

CLAPTON

first thing to look at is your OH income.

do you have a business plan... when will the business allow a proper wage to be withdrawn... at the moment it looks like a hobby job.
wouldn't it be better for OH to get a proper job at least until you can return to work (assuming you are able to return to work).
It makes no sense to try to start a business when you already have debts of 25,000 and you are overspending by 90 per month and expect a lower income soon too as well.



how accurate is the SOA?
presumably you are a family of 2 adults plus two children?
do you have any child care costs, any clothes spending , school related, dental/medical/optical etc

You really need to address the income issues and review the SOA before making any decisions about the debts.

Scotland has the equivalent of IVA ..called Trust Deeds but I don't know any details...

RAS

Hi

Would echo clapton on this - your family simply cannot afford to have your partner not producing an income at this time. he needs to get into work befoe you go on mat leave if at all possible, if only temporarily

And I know it is much better if you can take 9 months off work for mat leave but in the circumstnaces, it might be better for you to go back after 18 week plus holiday and OH to be the full-time carer for a few months, That is unless he has found work that pays more than you earn by then.

leebarton

Many thanks for your replies. We do have a strong business plan and premises in mind - it is just taking a long time to come through. I understand what you say about a hobby - but I think that is because it was year one and any money was reinvested. If it wasn't for the landlord selling the lease to another company we would be in a totally different position. We should start to be able to take a wage again in the new year. I did wonder about the possibility of the Scottish version of an IVA as our biggest expenditure is the credit cards and loan which never seem to be any less!

leebarton

CLAPTON wrote: »

first thing to look at is your OH income.
how accurate is the SOA?
presumably you are a family of 2 adults plus two children?
do you have any child care costs, any clothes spending , school related, dental/medical/optical etc

We are currently 2+2. They are both at high school so do not have childcare costs. We are lucky that we are given some clothes, but we also buy as part of the grocery budget. They are not brand conscious - if anything they don't like brand names which helps. Dental care is free and is optical care. We do spend a bit on days out but this is kept to a minimum.

RAS

Hi

You need to talk to CCCS, see here for details http://www.moneysavingexpert.com/loans/debt-help-plan#help

They can offer advice on the Scotish situation.

I would also suggest speaking to Nation Business debt line, so that you both understand the affect that an IVA or DMP would have on your ability to get finances for your company.

I am not sure why you think an IVA would be helpful, unless you have been watching day-time TV. IVas are a very good way of making money for fee-paying debt companies and Insolvencey prractitioner and not a good way of dealing with debt for most people. The only way out is bankruptcy, which would prevent either of you being company directors so you need some very careful advice.

leebarton

Thanks again for the helpful advice. I don't watch daytime tv yet - I am sure I will get my fair share of that on maternity leave!

Having sat down and worked it out - we think that raising an extra £100 a month is achieveable by cutting back on groceries and I will be using the car less when I finish work. We have some fairs and events coming up so we need to be better about taking money out of the business.

I think I needed a reality check - I know there isn't an easy way out of debt, but the slog will be worth it in the end.